Increase shown in new home construction activity

According to the data, there was a small increase in the number of new homes that commenced construction in the December quarter, bringing the total number of new homes that commenced construction in 2019 to 174,246.

“Consistent with leading indicators of building activity, which showed an improvement in new home construction, there was a 1.2 per cent increase in new home construction in the December quarter,” said Angela Lillicrap, HIA economist, commenting on the findings.

“This quarterly increase at the end of 2019 was reported in both detached dwellings and multi-units, increasing by 0.1 per cent and 2.9 per cent, respectively.

“Despite the improvement in the December quarter, the total number of new homes that commenced construction in 2019 was 22.6 per cent lower than 2018.

“The second half of 2019 saw a marked improvement in housing market sentiment, and leading indicators were suggesting that demand for new homes had stabilised and would return to growth going into 2020. This is confirmed by the number of new home starts picking up slightly in the December 2019 quarter.

“Victoria reported the weakest quarter for multi-unit commencements since 2009. This result follows a sustained boom in the state’s multi-unit construction. It represents a return to a level of construction closer to what was typical prior to those boom years,” concluded Ms Lillicrap.